People’s United Bank faces opposition in proposed acquisition of New York bank

1 / 1

Back to Gallery

The proposed acquisition of Suffolk Bancorp by People’s United Financial has sparked a lawsuit and accusations that People’s is not lending to blacks or Hispanics.

Bridgeport-based People’s announced its plans to acquire Suffolk, of Riverhead, N.Y., for $402 million in stock in late June. The deal is subject to regulator and shareholder approval.

Earlier this month, a Suffolk shareholder, Paul Parshall, filed a suit in federal court alleging that Suffolk Bancorp CEO Howard Bluver and others involved in the transaction unfairly “favored” People’s over other bidders.

Bluver “steered the deal towards its favored bidder, People’s United, to secure employment with the combined company,” the lawsuit states. “During this process, Bluver and the individual defendants refused to entertain inquiries from four different companies that reached out expressing an acquisition interest, telling those companies that a deal was not likely to occur and any strategic discussions would be unproductive.”

Bluver will become People’s United’s New York region president if the merger were to go through, People’s has announced. The lawsuit is seeking class action status.

The office is accepting comments on the proposed acquisition until Friday, according to its website.

Lee, who was featured in The New York Times in May for butting heads with the United Nations’ public relations team and losing some of his priviliges covering the U.N., has complained in the past about other bank mergers.

In his letter regarding the People’s acquisition, Lee points to documents filed online under the Home Mortgage Disclosure Act that show in the New York City metro area, People’s gave 80 conventional home loans to people who identified as white in 2014, the last year for which the data is publicly available, and none to those who identified as black or Hispanic.

In the Nassau and Suffolk county metro area, the same pattern held true.

A look at the Fairfield County data shows People’s gave 300 conventional home loans to people who identified as white and 32 of those loans to blacks and Hispanics combined in 2014. However, a look at JP Morgan Chase’s numbers for the same year show a similar pattern in the county. That bank reported 278 conventional home loans to white people, compared to 20 for black and Hispanics combined.

Elizabeth Montgomery, a People’s United spokeswoman, said the bank does not comment on pending litigation, but noted that it feels “comfortable” with its lending practices. “We’re a highly regulated institution and we’re very proud of our history of residential lending and we’re comfortable with our practices,” she said.

Suffolk did not return a call for comment.

Jeff Gentes, a managing attorney at the Connecticut Fair Housing Center, who deals with fair lending and foreclosure prevention, cautioned that the data should be considered along with other factors. “Looking at the raw numbers by themselves doesn’t get you far enough,” he said.

Gentes said the bigger picture includes the area in which the loans originated from, income level and credit scores of potential homebuyers, among other facts. “Those things all factor into it,” he said.